Court of Appeal for Ontario

Date: 2018-01-26 Docket: C63865

Judges: Laskin, Sharpe and Fairburn JJ.A.

Between

Stanley Tam aka Stanley Bor Tam, 1202817 Ontario Inc., RTM Resources Inc. and 1041376 Ontario Inc. Appellant (Defendant)

and

Nahed El-Hawary Respondent (Plaintiff)

Counsel

Martin Diegel, for the appellant

Jean-François Laberge, for the respondent

Heard and released orally: January 22, 2018

On appeal from: the judgment of Justice Lynn Ratushny of the Superior Court of Justice, dated April 28, 2017.

Reasons for Decision

[1] The appellants concede that the motion judge did not err in finding that Tam and the pharmacy, 1202827 Ontario Inc. ("120") are liable. The appellants argue, however, that the motion judge did err in finding that the landlord, 1041376 Ontario Inc. ("104"), and RTM Resources Inc. are also liable.

[2] The appellants make two submissions. First, the statement of claim pleads that these defendants are liable because they intended to defeat the respondent's claim, and yet the motion judge held that the question of intent could not be decided until after a trial. Second, the respondent pleaded that 104 and RTM were liable as affiliates, and yet she led no evidence to show that they were affiliates.

[3] We do not agree with the appellant's argument. On the pleadings point, once the appellants concede that Tam and 120 are liable, they concede that under the oppression remedy it is effect not intent that matters, as indeed the motion judge found.

[4] On the affiliates point, we are satisfied that the motion judge's reasons are sufficient to support a finding that both 104 and RTM are affiliates. Under section 1(4) of the Ontario Business Corporations Act, one body corporate shall be deemed to be affiliated with another body corporate if each of them is controlled by the same person. In para. 3 of her reasons, the motion judge found:

The defendant Mr. Tam has been the sole director and sole shareholder of the Pharmacy since June 2011. He is also the sole director of the defendant 1041376 Ontario Inc. ("104"), one of the directors of the defendant RTM Resources Inc. ("RTM") and he agreed during an examination in aid of execution that RTM is a company he controls. He said in that examination that he is also a shareholder of 104 and RTM, although the Pharmacy's corporate tax returns for the taxation years 2013 and 2014 appear to suggest it is the Pharmacy that owns 100% of the common shares for 104 and RTM and not Mr. Tam.

[5] And then in para. 59, the motion judge also found:

I conclude by finding that the actions or omissions of Mr. Tam, as director of the Pharmacy and as the controlling mind of the other defendants, were unfairly prejudicial and unfairly disregarded the interests of the plaintiff.

[6] These findings are buttressed by the timing of the transfers between the various companies, which were virtually instantaneous.

[7] For these brief reasons the appeal is dismissed, with costs to the respondent in the amount of $15,000, inclusive of disbursements and HST.

"John Laskin J.A"

"Robert J. Sharpe J.A"

"Fairburn J.A."